Recent technological advances in many fields, and particularly in wireless communications, have made an already difficult product/service provider (“service provider”) determination even more difficult. That is, should the service provider extend credit to a potential or existing customer, or does extending the customer credit present the service provider with a heightened financial risk? Stated alternatively, a particular customer (i.e. including an applicant/potential customer or existing customer) might in fact be a credit risk. For example, certain customers might have or might develop a history of delinquency in paying their bills (“defaulters”). Other customers (referred to hereinafter as defrauders) might have or might develop a history of securing services without the intent to pay for those services. While determining whether or not to extend credit to a customer has long been problematic, technological advances are increasingly providing customers with greater opportunities for hiding and disguising prior or ongoing acts which identify them as credit risks. The advent of wireless communication technologies is further expanding such opportunities both domestically and internationally.
Methods used by defrauders to secure services, and particularly cellular telephone services, can be divided into the broad categories of technical fraud and subscription or subscriber fraud. Technical fraud, for example, broadly comprises securing unauthorized access to a service system by technological infiltration.
Unfortunately, while methods used by credit risks to commit technical fraud are often discoverable and defeatable to some extent, each new service provider precaution is typically met with a further method for defeating the precaution. For example, an early method used by credit risks to infiltrate analog wireless telephone systems is known as tumbling. Tumbling involves changing a mobile identification number (“MIN”) or cellular phone number (“CPN”) to correspond with the internally programmed electronic serial number of a cellular telephone, thereby providing access to a communications network. After discovering the use of tumbling, service providers added the precaution of requiring a received MIN-ESN combination to match a registered combination before granting access to a network. While tumbling essentially disappeared, defrauders soon began committing what is known as cloning fraud. With cloning fraud, a defrauder copies the MIN-ESN combination assigned to a bona fide subscriber and then uses the combination to gain network access. The combination is obtained either directly from service provider data (generally with the aid of an unscrupulous service provider employee) or by capturing the combination from the airwaves (for example, as a user drives by with an activated car telephone). While service providers are developing various precautions for defeating cloning fraud, new methods for infiltrating analog networks are likely to appear.
Much promise in thwarting the efforts of (at least known) technical fraud is attributed to the expected replacement of analog systems with digital systems. For example, digital encryption, frequency switching and authentication methodologies, such as GSM, CDMA and TDMA, are already being implemented in the growing digital networks of Europe and the Middle East. Similar precautions are also expected to become prevalent in the United States as the use of digital networks surpasses the use of analog networks by the end of 1998. Unfortunately, while the new precautions of digital technology might result in dwindling instances of technical fraud, increasing instances of alternative credit risk methodologies are also likely to appear. For example, instances of what will be referred to hereinafter as subscriber fraud have already been reported in countries where digital networks are becoming prominent.
In subscriber fraud, a defrauder secures authorized services from a service provider, but secures such services by falsification of the service user's identity. For example, a credit risk might submit false identification information to a service provider employee while applying for services. A defrauder might alternatively supply bona fide information during the application process, but without an intention to pay for credited (or subscription) services. In another form, a defrauder might similarly supply bona fide information, but the information might identify another individual or interest. For example, an applicant for services might provide information that identifies a subscriber of the same or another service provider. The subscriber information might have been purchased from an unscrupulous service provider employee or another source, such as public information sources. A defrauder might also obtain another person's identifying information by submitting a change-of-address form to the postal service and then copying the information from that received in the other person's mail. A still further subscription fraud example is roaming subscription fraud. In roaming subscription fraud, a defrauder typically secures unlimited access to services outside the area serviced by a “home” service provider (“roaming”) using a fictitious or copied name (i.e. an alias), and then extensively uses the services of “foreign” service providers. Since the home service provider will not be billed by the foreign service provider for some period of time, the defrauder's usage will remain hidden from the home service provider during that time. The defrauder can then move on to another unsuspecting home service provider.